Louisville and Nashville Railroad Co. v. Mottley

Facts

The opinion gives the facts only in outline, through the two questions the case raised. Its text never names the parties. Read with the caption, those questions point to Mottley as the holder of a contract with the Louisville and Nashville Railroad Company for transportation. The Court describes the holders of such a contract as persons who, in good faith and before Congress acted, had accepted it in satisfaction of a valid cause of action against the railroad. In other words, they gave up a legal claim against the railroad in exchange for its promise of transportation. An act of Congress of June 29, 1906, in part forbids the giving of free passes. The same part forbids collecting any different compensation for carrying passengers than the amount specified in the tariff filed. The suit began in the federal Circuit Court with a bill, the written complaint in a case in equity. The case raised two questions of federal law: whether the 1906 act made it unlawful to perform the contract, and, if it did, whether the act violated the Fifth Amendment. There was no diversity of citizenship, meaning the parties were not citizens of different States. The only possible ground for federal jurisdiction was that the suit arose under the Constitution and laws of the United States.

Issues

1. Did the federal Circuit Court have jurisdiction over Mottley's suit as one arising under the Constitution and laws of the United States, when the federal questions in the case were whether the 1906 act barred performance of the contract and whether that act violated the Fifth Amendment?
2. Must the Supreme Court see that the Circuit Court did not exceed its jurisdiction, which statute defines and limits, even though neither party questioned that jurisdiction?

Holding

Mottley's suit did not arise under the Constitution and laws of the United States, because the questions about the 1906 act were not part of Mottley's own cause of action. With no diversity of citizenship either, the Circuit Court had no jurisdiction, so the Court did not decide either question about the act.